Knight Transportation Inc (KNX)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	18.46	22.06	15.27	14.75
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	0.00	18.46	22.06	15.27	14.75

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00

The cash conversion cycle, a key indicator of a company's operational efficiency, has shown fluctuations for Knight Transportation Inc over the years.

In 2020, the company's cash conversion cycle stood at 14.75 days, indicating that it took Knight Transportation approximately 14.75 days to convert its investments in inventory and accounts receivable into cash flows. The slight increase to 15.27 days in 2021 suggests a slightly longer cycle, potentially due to changes in inventory management or payment collection practices.

The significant jump to 22.06 days in 2022 indicates a longer period for the company to convert its resources into cash, which could be a concern for its liquidity and working capital management. However, Knight Transportation managed to reduce this cycle to 18.46 days by the end of 2023, suggesting some improvement in its operational efficiency during that year.

Notably, in 2024, the cash conversion cycle dropped to 0.00 days, which could signal an anomaly or potential data reporting error. It is important to investigate this sudden change as a zero-day cycle would imply that Knight Transportation was able to instantly convert its investments into cash, which is unlikely and may require further scrutiny.

Overall, fluctuations in the cash conversion cycle for Knight Transportation Inc reflect changes in its working capital management and operational efficiency. Monitoring and analyzing these trends can provide insights into the company's ability to effectively manage its resources and generate cash flows.